Ahead of the Bell: BorgWarner

FILE - In this Tuesday, Dec. 11, 2012 file photo, an advertisement in the classified section of the Boston Herald newspaper calls attention to possible employment opportunities in Walpole, Mass. Economists forecast that employers added 155,000 jobs in December, according to a survey by FactSet. That would be slightly higher than November's 148,000. The unemployment rate is projected to remain at 7.7 percent. (AP Photo/Steven Senne, File)

In this Wednesday, Dec. 12 2012 photo a job seeker leaves his contact information with a potential employer during a job fair in New York. More Americans sought unemployment benefits in the last week of 2012, though the winter holidays likely distorted the data for the second straight week. (AP Photo/Mary Altaffer)

Floor traders check their handheld computers at the New York Stock Exchange in New York, Wednesday, Dec. 26, 2012. (AP Photo/Kathy Willens)

President Barack Obama walks across the tarmac to board Air Force One at Honolulu Joint Base Pearl Harbor-Hickam, Wednesday, Dec. 26, 2012, in Honolulu, en route to Washington. With a yearend deadline looming before the economy goes off the so called fiscal cliff, the president is cutting short his traditional Christmas holiday in Hawaii. (AP Photo/Carolyn Kaster)

FILE - In this Thursday, Nov. 22, 2012, file photo, a customer makes a purchase in the Times Square Toys-R-Us store in New York. U.S. retail sales rose 0.3 percent in November from October, the Commerce Department said Thursday. That offset a 0.3 percent decline in October from September. (AP Photo/John Minchillo, File)

FILE - In this Oct. 28, 2012, file photo, Jessie Rivera, 10, of New York, brings pink sandbags to the door of the shop in New York. Americans cut back sharply on spending at retail businesses in October, an indication that some may still be cautious about the economy. Superstorm Sandy may have slowed business at the end of the month. The Commerce Department said Wednesday, Nov. 14, 2012, that sales dropped 0.3 percent after three months of gains. Auto sales fell 1.5 percent, the most in more than a year. (AP Photo/Craig Ruttle, File)

In this Friday, Oct. 26, 2012, photo, people shop at a mall in Cheektowaga, N.Y., Friday, Oct. 26, 2012. Americans cut back sharply on spending at retail businesses in October, an indication that some may still be cautious about the economy. Superstorm Sandy may have slowed business at the end of the month. The Commerce Department said Wednesday, Nov. 14, 2012, that sales dropped 0.3 percent after three months of gains. Auto sales fell 1.5 percent, the most in more than a year.(AP Photo/David Duprey)

FILE - In this Tuesday, Dec. 6, 2011, file photo, an Occupy Wall Street activist places tape on a boarded up house during a tour of foreclosed homes in the East New York neighborhood of the Brooklyn borough of New York. Goldman Sachs and Morgan Stanley announced Jan. 16, 2013, they will pay a combined $557 million to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes. (AP Photo/Mary Altaffer, File)

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NEW YORK (AP) — A Sterne Agee analyst on Monday cut his rating for BorgWarner Inc. to "Neutral" from "Buy," predicting that weaker vehicle demand in Europe will slow the auto parts supplier's growth at least for the near term.

Michael Ward also pointed to the Auburn Hills, Mich.-based company's current stock price, saying that the shares have reached their fair level in light of the risks surrounding European demand.

He noted that industry wide vehicle production rates in Europe, which accounts for about half of BorgWarner's business, are expected to be down about 10 percent in the first quarter, with weak vehicle demand expected to last into the summer.

Ward cut his 2013 earnings prediction by 30 cents to $5 and his 2014 estimate by 25 cents to $5.75. Analysts, on average, expect a 2013 profit of $5.24 and a 2014 profit of $6.26, according to FactSet.

"In our view, BorgWarner's track record, growth prospects and ability to help vehicle manufacturers meet more stringent standards globally for fuel economy and emissions have rewarded the company with a premium valuation in the supplier group and we expect the favorable view to continue," Ward wrote in a note to investors.

BorgWarner shares fell 29 cents to $77 in premarket trading. They have traded in a 52-week range of $60.17 in late July after rising as high as $87.45 in March 2012.